THIS is what actually happened, all in a measly decade…
America’s FINAL era of prosperity ended with the Tech Wreck of 2000, yielding the first major recession since the Greenspan-led Fed started juicing the money supply in the late 1980s. Pandora’s Box officially opened when Glass-Steagall was repealed in 1999, urging banks to create dangerous investment products, and investors to take the bait. Allowing commercial banks to invent risky investments was like allowing Dr. Jekyll into a lab, an intoxicating opportunity to create “free money” by experimenting with financial fire. Even the world’s “leading minds” believed the internet would render WORK obsolete and WEALTH ubiquitous, a fitting end to a period in which the Eastern Hemisphere was handed a century’s worth of U.S. manufacturing jobs. Most of them by U.S. companies themselves, VOLUNTARILY, by the way.
To wit, General Electric, ‘America’s greatest company,’ at least before Apple emerged as the smart phone king of the world. Over the past decade, GE has shed 34,000 U.S.-based jobs, while adding 25,000 overseas. More than half its employees are now internationally-based, a percentage expected to continue climbing. In 2010, GE’s $5.1 billion of U.S.-based profit was not only untaxed, but the firm received a $3.3 billion tax REFUND. To add insult to injury, GE was BAILED OUT from sure bankruptcy in 2009 by a COVERT U.S. government bailout, fronted by its favorite propaganda puppet, Warren Buffett. Those losses were 100% due to DERIVATIVES EXPOSURE via its toxic finance unit, GE Capital, and you can be sure GE Cap will be back in the news when the derivatives monster consumes its next meal.
After the Tech Wreck, the U.S. was faced with a recession and, simultaneously, enormous secular job losses. The national debt had skyrocketed from $2.6 trillion when Alan Greenspan took over the Fed in 1987 to $5.6 trillion at the peak of the internet bubble in 2000, but no one was asking how that could occur if times were so “prosperous.” The reason, of course, was the dollar was peaking, and with it a frenzied period of borrowing and spending, ending the strongest era of American purchasing power in its history. The world thought the dollar was so strong due America’s “greatness”, when in fact it had more to do with the collapse of the Eastern Block than anything else. But Russia and Eastern Europe eventually recovered, and with their resurgence the ERA OF CHEAP COMMODITIES was over, FOREVER.
Around that same time, circa 2000, Greenspan learned his printing press could be used to stave off recessions, the consequences be damned. Sure, he was a disciple of the ultimate capitalist, Ayn Rand, and wrote Gold and Economic Freedom in 1966. But why go with your gut, or the lessons of history that made him write that piece, when it’s so much easier to PRINT MONEY and espouse theories of new banking paradigms?
Simultaneously, Sir Alan was exposed to the growing strength of OTHER manipulation schemes (aside from money printing), such as the “President’s Working Group on Capital Markets”, i.e. the PPT, and the Gold Cartel, while “sects” of “Greenspanism” emerged on the scene, such as Robert Rubin’s “Strong Dollar Policy” and Larry Summers’ “Gibson’s Paradox.” The POWER of these manipulative tools surged through his veins, and his journey to the DARK SIDE was complete when Wall Street infiltrated Washington with its ill-begotten, post-Glass Stegall profits.
Then came 9/11, the most important inflection point in U.S. history, in my view. This was the day the government OFFICIALLY took over our lives, under the pretense of “national security.” Was it a false flag attack, of which such evidence grows stronger each day, or a band of 20 highly talented, borderline GENIUS Moslem terrorists? I’m not sure we’ll ever definitively know. Irrespective, the loss of American FREEDOM was far more damaging than 2,996 lives in the Twin Towers, the Pentagon, and the four downed planes. Not to mention, the 10,000 dead American soldiers, and more than 1,000,000 civilians either directly or via terrorist bombings.
I know many people don’t care about these deaths, or practically anything that doesn’t prevent them from watching reality TV, playing video games, or texting gossip. However, more than a million people have died because the Bush Administration attacked Iraq with no credible reason, which REALLY PISSES ME OFF. And not to show political favoritism, Obama campaigned heavily on a promise of bringing soldiers home, lying through his teeth and proving to be just as warlike as George Bush.
Back to my RANT, 9/11 represented the time when the government took over our LIVES. The Patriot Act, the the Department of Homeland Security, the TSA, you name it. Anything to subvert the constitution in the name of “national security”, and they did it. Moreover, with America’s quality jobs gone to China (principally due to U.S. government policy, by the way), citizens started to believe the government teat was its only hope of survival, as well as its RIGHT. America’s work ethic withered with its manufacturing base, and government entitlement programs literally EXPLODED, funded by an even bigger EXPLOSION of lobbying dollars, particularly from Wall Street and the military.
By the time the “American Dream Downpayment Act” was signed in 2003, Greenspan had successfully usurped the economic cycle by substituting industrial production with MONEY PRINTING, creating a housing bubble far larger, and with far greater ramifications, than the tech bubble. European central banks figured this game out as well, and thus the age of government and banker controlled markets began.
The U.S. had a leg up on Europe because the dollar was the “world’s reserve currency”, and thus added incentive to blow its bubble up larger, greedily putting tens of billions of bonuses and perks into the laps of Washington and Wall Street’s “leaders.” The populace went on an UNPRECENDENTED borrowing and spending spree, and was encouraged to do so by government decree, such as the aforementioned “American Dream Downpayment Act,” and corporate greed, via monstrous, essentially unregulated mortgage companies, supplemented by Wall Street-engineered derivative products that “leveraged” the expansion of the real estate bubble. Of course, that all ended when its “weakest link,” the subprime segment, showed the real estate boom to be the Ponzi scheme it was, and, in turn, the Wall Street banks to be the naked emperors they really were.
By now, Ben Bernanke had taken over the Fed, leaving Greenspan to slink into the shadows and spend his remaining days rewriting history by warning of the things HE CREATED AND PRACTICED. Bernanke had not a shred of private sector experience, but from DAY ONE claimed to be an expert on the Great Depression, POSITIVE it could have been avoided if only more money were printed. In this famous 2002 speech, he suggested that, like Greenspan, he would ignore the Fed’s primary mandate of PRICE STABILITY, in lieu of creating nominal GDP gains and inflated stock prices.
The U.S. government has a technology called a printing press (or, today, its electronic equivalent) allowing it to produce as many dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even credibly threatening to do so, the U.S. government can reduce the value of a dollar in terms of goods and services, which is equivalent to raising prices of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
It didn’t hurt that the means of MEASURING GDP was mangled beyond recognition, nor the accounting rules governing how corporations accounted for such. In other words, Bernanke realized he not only had a printing press at his disposal, but “fully armed and operational” manipulation teams in the PPT and Gold Cartel, as well as full cooperation of Federal regulation groups such as the FASB, SEC, and CFTC. Furthermore, by then Wall Street had COMPLETELY taken control of the government, allowing it to UNITE its selfish, destructive goals with that of the Fed, which, by the way, it already OWNED!
Throw in the EXPONENTIAL growth in derivatives, High Frequency Trading programs, and the heightened belief that ANYTHING can be papered over with freshly printed money, and the stage was set for the coup de grace, the EXPLOSION of sovereign debt (which, of course, trickled all the way down) that pushed the GLOBAL, dollar-based fiat currency past the point of no return. As my readers are well aware, no currency in HISTORY has survived this long without a major devaluation, or full-out collapse, and thanks to the above “witches brew,”, the GLOBAL monstrosity built over the past 40 years has been pushed to the precipice.
The ball started rolling downhill during GLOBAL MELTDOWN I in late 2008, when the Fed, ECB, BOE, BOJ, et al MAXXED their balance sheets in the name of SURVIVAL, pushing us so far past the Maginot Line, it can no longer be seen in the rear-view mirror. This brazen act of Weimar Era MONEY PRINTING, a slap to the fact of “Mother Financial Nature”, bought TPTB two years of phony market calm. Unfortunately, this deal with the devil ensured the END GAME will occur SOONER rather than later.
The MONEY PRINTING Ponzi Scheme must mathematically end, and is doing so NOW. This is not your typical game of musical chairs, in which one person is OUT while the rest remain IN. In this case, “the 99%” will financially DIE while “the 1%” LIVE. And I do mean “LIVE” and “DIE”, as the ramifications of a collapsed currency are certain to include shortages of food, energy, and other vital life necessities.
In my mind, only one questions remains – WHAT will be the flashpoint ending this lethal experiment in UNFETTERED, GLOBAL MONEY PRINTING?
Will it be an Italian default…
…or chinks in China’s armor…
…yielding PHYSICAL buying powerful enough to destroy the Gold/Silver Cartel…
…or a “black swan event” such as an Iranian military confrontation with Israel or the U.S.?
Who knows, as what ACTUALLY happens could be a “sixth-sigma event” one no one was even aware of (such as MF Global)?
When it comes to LIFE and DEATH financial matters, I don’t take UNNECESARY RISKS. That is why I ONLY own PHYSICAL precious metals, which I view as the lowest risk investment class in the world. PROTECT YOURSELF, and do it NOW!
Author : Andrew Hoffman
Published: November 8th, 2011
- Exposing Crony Capitalists (lewrockwell.com)
- Guest Post: Trying To Stay Sane In An Insane World – At World’s End (zerohedge.com)
- Robert Kuttner: Will the Fed Kill the Recovery? (huffingtonpost.com)
- Lynn Parramore: Seven Reasons to Fight Obama on Picking Out-of-Touch Crony Capitalist Larry Summers as Fed Chair (nakedcapitalism.com)
- 7 Reasons to Fight Obama on Picking Out-of-Touch Crony Capitalist Larry Summers as Fed Chair (alternet.org)
- Trying To Stay Sane In An Insane World – At World’s End (safehaven.com)
- Still, it’s what we know – that ain’t so – that gets us into trouble (timpanogos.wordpress.com)
- Trying to Stay Sane in an Insane World – Part 3 (theburningplatform.com)
- Trying To Stay Sane In An Insane World – At World’s End (silverdoctors.com)
- ZeroHedge: Guest Post: Trying To Stay Sane In An Insane World – At World’s End (silveristhenew.com)